If some expense items are related to your income,and your income increases above budgeted amounts,you can expect
A)favorable variances in both income and expense accounts.
B)budgeted savings to remain about the same.
C)favorable income variances and unfavorable variances in related expenses.
D)savings will decrease.

Question

Quizplus · Accepted Answer

If income increases above budgeted amounts, there will be a favorable variance in income accounts. However, the related expenses will also increase, resulting in unfavorable variances in those accounts. Therefore, there will be favorable income variances and unfavorable variances in related expenses. Budgeted savings may remain the same, but it could also decrease depending on the magnitude of the increase in expenses.

If Some Expense Items Are Related to Your Income,and Your